The archived blog of the Project On Government Oversight (POGO).

Aug 06, 2009

New Documents Detail Threats to Fire Amtrak Inspector General

A pair of new, just-releaseddocuments
show that Amtrak, America’s
federally subsidized rail network, wanted to fire its independent Inspector
General, who was effectively forced to resign several weeks ago. One of the documents, a June 2009 draft letter was to be
signed by Amtrak chairman, Thomas C. Carper. The language in the letter
is blunt. Addressed to Vice-President Biden—in his capacity as President of
the Senate—and to House Speaker Nancy Pelosi, the letter was to inform Congress—as required by law—of Amtrak’s plan to dismissInspector General Fred E. Weiderhold,
Jr. Citing a long list of alleged lapses, shortcomings and failures,
Amtrak’s chairman wrote that Weiderhold, "is no longer the effective
Inspector General that our Company needs" and that he "will be
removed from his position."

The letter was never sent. Instead, Amtrak’s management apparently threatened
to giveit to Congress last month as a
none-too-subtle inducement for Weiderhold to step aside, retiring from his role as one
of Washington’s
longest-serving inspectors general. In a subsequent separation deal with
Amtrak, Weiderhold agreed not to disclose details of his retirement, involving
a package worth more than $310,000 that included compensation for unused
vacation, severance, health care and outplacement assistance.

In a recent interview, which did not mention the draft firing letter,
Weiderhold told Politicothat his departure arrangements were typical for Amtrak executives, adding that he had been planning to leave his job
anyway.

But the draft firing letterrevealsdeep and bitter conflicts between Amtrak
management and their Inspector General. Included in Carper’sreasons for firing his IG are allegations that
Weiderhold:

"… failed to keep the
Chairman and the Board fully and currently informed concerning fraud,
waste, abuse and other deficiencies within the Company."

"…has not properly
managed the investigations function within the Office of Inspector General
to the quality standards required."

"… is excessively
involved in the daily management of the Company to the detriment of his
obligation to focus on his fundamental duties."

"… cannot and does not
discharge his duties with the independence and objectivity required of the
position."

Weiderhold declined to
respond publicly. Sources tell POGO thatthe former Inspector Generalhad
grown wearyafter months ofwhat he viewed as opposition from Amtrak’s
management and board.Confronting
pressing family issues, and the prospect of more battles with Amtrak, he
decided it was time to go.

On the
same day Weiderholdopted to retire,
June 18, the law firm of Willkie Farr & Gallagher, LLP completed a
"Report on Matters Impairing the Effectiveness and Independence of the Office of Inspector
General." That report, now public, alleges serious and persistent interference by Amtrak management with its Inspector General in
violation of the law.Amtrak earlier released
a statement saying there was “no relationship”between the report and Weiderhold’s retirement.

Tensions between Amtrak management and
the IGgrew heated in 2006, after a
joint investigation by Weiderhold and the Inspector General of the Dept. of
Transportation found that Amtrak had spent more than $100 million in mismanaged fees to outside
lawyers over a five year period, allegedly violating Amtrak billing rules.

More recently, congressional sources
received documents showing Amtrak has spent nearly $75 million on outside
lawyers in 2007, 2008, and the first half of 2009. That finding, if confirmed,
and the accelerating rate of spending on outside counsel—a significant
portion of which was spent on battling its own IG—is sure to raise hackles
about Amtrak’s government-subsidized expenditures, as well as the conduct of
its top lawyer, Eleanor Acheson, who has been the company’s general counsel
since 2007, and is Hillary Clinton’s former roommate at Wellesley College.

A second document just made public shows howAmtrak’s chairman and management struggled to
get rid ofWeiderhold.It is a letterdated July 30 and signed by Charles
Grassley, ranking member of the Senate Finance Committee, and Rep. Darrell
Issa, ranking member of the Committee on Oversight and Government Reform in the
House. Addressed to Jeffrey Zients, Deputy Director oftheOffice of Management and Budget, the pair
describe tactics apparently designed to force Weiderhold to leave his job
without apublic fuss.

According to Grassley and Issa, Amtrak presented Weiderhold with a separation
agreement on June 17, "indicating that if he did not sign it by June 19,
the Chairman of the Board (Carper) would send a 30-day notice to Congress to
begin the process of removing him as Inspector General." But that
proved unnecessary. Instead, the letter says that, on June 18, Weiderhold
agreed to leave Amtrak.

In their letter, Grassley
and Issa point out that the law requires Congress to receive prior notice when
inspectors general are replaced, a provision that Amtrak did not comply with in
the Weiderhold case.

The revelations surrounding
Weiderhold’s departure are likely to stir controversy, given a string of inspector general firings earlier this year that
have drawn Congressional attention.

Amtrak is run as a private
company, but is owned and heavily subsidized by the federal government (originally set to receive $2 billion in 2009, itobtained an additional $1.3
billion in stimulus funds). Amtrak’s board appoints the Inspector
General. In Weiderhold’s case, he was appointed in 1989, and is the only
Inspector General his agency has ever had, a role that has brought him into
frequent conflict with both Amtrak’s board and the office of its top lawyer, or
general counsel.

Reached by POGO, an Amtrak spokesman saidthe company stood by its handling of the Weiderhold departure, and emphasized
it wasworking with Congress to resolve
questions about the matter.In an
earlier statement,Amtrak said its board
“is committed to having an OIG that operates under best practices consistent
with the Inspector General Act.The
Board has been concerned for some time about whether best practices are
currently in use in the OIG.”